Capital Gains Tax Accountants in London

Capital gains tax (CGT) applies when you dispose of an asset that has grown in value — you're taxed on the gain, not the sale price. "Disposal" is wider than people expect: selling, gifting to anyone other than your spouse or civil partner, swapping an asset, or receiving compensation for one can all trigger CGT.

The most common disposals we deal with are second homes and buy-to-let properties, shares and investment funds held outside ISAs and pensions, and business sales — selling a company, business assets or goodwill. Each has its own rules, rates and reliefs, and each rewards planning done before the sale rather than after it.

Everyone has an annual exempt amount of £3,000 — gains up to that figure in a tax year are tax-free. It was once much higher, which means disposals that used to be comfortably covered by the exemption now produce a tax bill, and more people are caught than ever before.

For most assets, capital gains are taxed at 18% or 24%, depending on whether the gain falls within your basic-rate band or above it. The gain is stacked on top of your taxable income for the year, so the same disposal can be taxed differently depending on what else you earned — and part of a gain can fall in each band.

Your position	Rate on the gain
Gain falls within your unused basic-rate band	18%
Gain falls above the basic-rate band (higher/additional-rate taxpayers)	24%
Qualifying business disposals (Business Asset Disposal Relief)	Reduced rates on lifetime gains up to £1 million

Because the rate hinges on your income, timing matters enormously. Selling in a year when your income is lower, spreading a disposal across two tax years, or making a pension contribution that extends your basic-rate band can all move part of a gain from 24% to 18%. This is exactly the kind of planning that has to happen before contracts are exchanged, not at tax-return time.

This is the rule that catches most people out. If you sell a UK residential property and CGT is due — typically a buy-to-let, a second home or an inherited property — you must report the gain to HMRC and pay the tax within 60 days of completion, using a separate online property return. It doesn't wait for your annual self assessment.

Miss the 60-day deadline and HMRC charges an automatic late-filing penalty, with further penalties and interest the longer it runs. Many sellers simply never hear about the rule until the penalty letter arrives, because solicitors handle the conveyancing and assume the tax side is someone else's job.

We prepare and file 60-day property returns regularly: calculating the gain (including improvement costs, buying and selling costs, and any reliefs), working out the right rate based on your expected income for the year, and submitting on time. If you're mid-sale now, contact us before completion — the clock starts the day the sale completes.

Selling the home you live in usually triggers no CGT at all, thanks to private residence relief. If the property has been your only or main home throughout your ownership, the gain is fully exempt — which is why most house sales never come near a tax return.

The relief gets complicated, and partial, in situations like these:

• You let the property out for part of your ownership — for example, you kept your old flat as a rental after moving
• You own two homes and haven't made (or reviewed) a main-residence election
• Part of the property was used exclusively for business
• The garden and grounds exceed the permitted area
• There were long periods when you didn't live there, beyond the final months of ownership that are always covered

In these cases the gain is apportioned, and the calculation turns on dates, elections and evidence. Getting the apportionment right — and claiming every period of deemed occupation you're entitled to — routinely saves thousands.

• Annual exempt amount — use the £3,000 exemption every year; it can't be carried forward, so staggering disposals across tax years multiplies it.
• Spouse and civil partner transfers — assets pass between spouses without CGT, so a gain can be shared to use two exemptions and two basic-rate bands.
• Business Asset Disposal Relief — reduced CGT rates on qualifying disposals of a trading business or company shares, on lifetime gains up to £1 million. The qualifying conditions (shareholding, employment, trading status, two-year holding period) must be met well before the sale.
• Losses — capital losses offset gains in the same year, and unused losses carry forward indefinitely once claimed. Old losses are frequently forgotten.
• ISAs and pensions — assets inside them are outside CGT entirely; where you hold an investment matters as much as what you hold.
• Gift and holdover reliefs — in the right circumstances, gains on gifts of business assets can be held over rather than taxed immediately.

None of this is aggressive avoidance — these are reliefs Parliament designed to be used. The difference between using them and missing them is usually just advice taken early enough.

1. Pre-sale review — ideally before you commit to a disposal, we estimate the gain, the rate you'll pay and the reliefs available, and flag any timing or structuring choices still open to you.
2. Accurate computation — we build the CGT calculation properly: acquisition costs, enhancement expenditure, incidental costs of purchase and sale, reliefs and losses.
3. Reporting — we file the 60-day property return where required, and report the gain on your self assessment tax return, ensuring the two tie up so HMRC has no reason to ask questions.
4. Payment and aftercare — you get a clear statement of what to pay and when, and if HMRC does raise an enquiry, we deal with it on your behalf.

We've been advising property owners, investors and business sellers across south-east London on capital gains since 1991 — from single buy-to-let sales in Eltham and Sidcup to full business disposals.